What is a Car Loan?
Some dreams are considered to be so sacred that they never come true. Owning a car which will enhance your reputation was one such dream until recent times due to the high price of any vehicle in India. But with easy EMI options and attractive interest rates, banks and NBFCs started offering car loans. These loans are specifically designed to buy a car or any other vehicle for that matter. By opting to take a car loan, now you can touch the golden dream of owning a car. Many banks and NBFCs also offer Used Car Loans. If you are interested in buying a previously used car or a second hand car, banks will help you in that aspect too.
What is Car Refinance?
Car refinance is a type of secured loan. You can avail funds by keeping your car as collateral to the bank or NBFC. This type of secured loan is getting popular day by day. Banks and NBFCs are also willing to give this loan. By opting for car refinance, one can get smaller loan amounts for shorter tenure. Until your car is kept as collateral to the bank, you can still use your car. Banks give loan on the basis of car’s current condition, borrower’s financial history, CIBIL score, ability to repay the loan and other debt obligations. The amount of loan is decided on the current on road value of the car. Banks give loan amount up to 60% to 70% of the car value for the tenure of maximum 60 months i.e. 5 years.
Why should you take a Car Refinance Loan?
There are various reasons to opt for a car refinance loan in India. We have listed some of them below
Secured Loan
Car refinancing is a type of secured loan. You get lower interest rate when you opt for a secured loan. The car’s original documents will be with the bank and will be returned once you pay off the loan. But you can use the car until the loan is being paid. If by any chance you fail to pay off the loan, it will be confiscated.
Multipurpose Loan
You can use funds from this loan to meet with any of your personal needs. Be it a medical emergency or a wedding or for debt consolidation; you can use it for anything. You don’t have to disclose the reasons behind taking this loan to the bank and can easily avail it accordingly to meet your purpose.
Easy Loan Terms
Banks offer loan amount up to 60% to 70% of the cars on road value. If you submit the documents correctly, the money is disbursed as quickly as in a day. The repayment period ranges from one year (12 months) to 5 years (60 months). Even the eligibility criteria are not very complicated.